Friedman is a Harvard alum who founded Los Angeles-based Canyon Partners in 1990. He previously worked in the mergers and acquisitions department at Goldman Sachs Group Inc. as well as at Drexel Burnham Lambert, according to his company’s website. He has undergraduate, law and business school degrees from Harvard.

Stein is a Harvard economics professor who returned to the university faculty last year after serving as a member of the Fed’s board of governors for two years. He also began working as a consultant to the hedge fund BlueMountain Capital Management this year, according to Harvard’s website.

The two were appointed effective July 1 and will attend their first meeting next month, Paul Finnegan, the newly appointed chairman of the endowment board, said in an e-mail.

While Harvard helped redefine how universities manage their money, pushing into alternatives such as hedge funds and private equity, it has trailed rivals since 2009 when it posted one of the steepest losses in higher education at 27 percent for the year. Jane Mendillo, the chief executive officer of the investment management company hired in 2008, resigned last year and was replaced by her deputy Stephen Blyth.

At the same it adds expertise, the board is losing Robert Kaplan, a former vice chairman of Goldman Sachs who has been on the Harvard Business School faculty. The Federal Reserve Bank of Dallas named Kaplan president on Aug. 17.

Finnegan was appointed to succeed James Rothenberg, who died at the age of 69 last month. Finnegan, co-founder of Chicago-based private equity firm Madison Dearborn Partners LLC, was already on the Harvard Management Co. board and he serves as the treasurer of Harvard Corp., the board overseeing the Cambridge, Massachusetts university.